According to Bankrate analyst, Greg Mcbride, two out of three economists are forecasting a recession in 2023, and many of our buyers are hesitant to make a move towards homeownership within a climate of economic uncertainty. However, the housing market and housing health in the Triangle area are not necessarily related to a recession. In fact, historically, mortgage rates decline during a recession, making it a better time to buy. Let's explore how mortgage rates and the economy have been related and how buyers can benefit from conditions.
Mortgage Rates and Recession
What is a recession? This is a period where the economy contracts, rather than expands. In the last six recorded recessions, 1980, 1981, 1991, 2001, 2008, and 2020, mortgage rates fell between 4.25% and 1%. If you are planning on becoming a homeowner in the next five years, and are unsure if this is a good time to finance, this recorded trend is good news. Where you finance a home with low fixed rates, you save money. Becoming a home owner is a big deal and the investment is great, but you are risking far more where rent prices are volatile and you are not building equity. The riskier move is renting, rather than building wealth as a homeowner.
Balancing Buyer Needs and Wants
If you are moving forward with becoming a homeowner, many of our buyers want insight on what they can expect from the current market. This is where having a seasoned Realtor is essential. With years of experience in a local market, Realtors can offer context for housing prices and can guide you with the best investment and decision for your first home or a move to a forever home. It is a balance between needs and wants in the current market.
According to The Monthly Housing Market Trends Report from realtor.com, "While the number of homes for sale is increasing, it is still 43.2% lower than it was before the pandemic in 2017 to 2019. This means that there are still fewer homes available to buy on a typical day than there were a few years ago." Buyers in todays market, especially on the Triangle, face a shortage of homes. With fewer homes available, buyers have to adjust expectations and be prepared for compromise.
Home Buyer Prep in 2023
To get the home of your dreams in 2023, you need to be preapproved prior to starting your home search, if you need to obtain financing. Once you have this number, search for homes that are less. The reason being is that you may need an escalation clause if you enter into a bidding war with other parties, or you may want to set aside a budget for renovations. This brings us to the second winning tip for today's homebuyer and that is setting your expectations with your family, partner or yourself on what you need, what would be nice, and what is non negotiable for your home.
When you have a number that you can afford, including either escalation or upgrade, or both, and you have your list of non negotiables, needs, and desires, contact My NC Homes. We have expert knowledge of the Raleigh Durham, Research Triangle area. Our expertise can help you not only find you a home that meets your needs, but we also understand the best professionals for lending, renovating, and contracting. Recession-proof your home buying process and buy the right home for your needs with My NC Homes. Contact us today!
Posted by Larry Tollen on
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